Medigap


Medigap

Medigap (Medicare Supplement) refers to various private supplemental health insurance plans sold to Medicare beneficiaries in the United States that provide coverage for medical expenses not or only partially covered by Medicare. Medigap's name is derived from the notion that it exists to cover the difference or "gap" between the expenses reimbursed by Medicare and the total amount charged. As of 2006, 18% of Medicare beneficiaries were covered by a Medigap policy.[1]

Contents

Eligibility

A person must be enrolled in part A and B of Medicare before they can enroll in a Medigap plan. During the open enrollment period which begins within 6 months of turning 65 or enrolling in Medicare Part B at 65 or older, a person may obtain a Medigap plan on a guaranteed issue basis (i.e. no medical screening required). Outside of open enrollment, the issuing insurance company may require medical screening and may obtain an attending physician's statement if necessary. Medigap insurance is not compatible with other forms of private Medicare coverage, such as a Medicare Advantage plan. [2]

Medicare recipients under age 65

Recipients of Social Security Disability Insurance (SSDI) benefits or patients with end-stage renal disease (ESRD) are entitled to Medicare coverage regardless of age, but are not automatically entitled to purchase Medigap policies unless they are at least 65. Under federal law, insurers are not required to sell Medigap policies to people under 65, and even if they do, they may use medical screening. However, a slight majority of states require insurers to offer at least one kind of Medigap policy to at least some Medicare recipients in that age group. Of these states, 25 require that Medigap policies be offered to all Medicare recipients. In California, Massachusetts, and Vermont, Medigap policies are not available to ESRD patients; in Delaware, Medigap policies are available only to ESRD patients.[3]

Products available

Medigap offerings have been standardized by the Centers for Medicare and Medicaid Services (CMS) into ten different plans, labeled A through N, sold and administered by private companies. Each Medigap plan offers a different combination of benefits. The coverage provided is roughly proportional to the premium paid. However, many older Medigap plans (these 'older' plans are no longer marketed) offering minimal benefits will cost more than current plans offering full benefits. The reason behind this is that older plans have an older average age per person enrolled in the plan, causing more claims within the group and raising the premium for all members within the group. Since Medigap is private insurance and not government sponsored, the rules governing the sale and offerings of a Medigap insurance policy can vary from state to state. Some states such as Massachusetts, Minnesota, and Wisconsin require Medigap insurance to provide additional coverage than what is defined in the standardized Medigap plans.

Some employers may provide Medigap coverage as a benefit to their retirees. While Medigap offerings have been standardized since 1992, some seniors who had Medigap plans prior to 1992 are still on non-standard plans. Those plans are no longer eligible for new policies.[4]

Over the years new laws have brought many changes to Medigap Policies. For example, marketing for plans E, H, I and j have been stopped as of May 31, 2010. But, if you were already covered by plan E, H, I or J before June 1, 2010, you can keep that plan. Medigap plans M and N took effect on June 1, 2010, bringing the number of offered plans down to ten from twelve.

Drug coverage

Some Medigap policies sold before January 1, 2006 may include prescription drug coverage, but after that date no new Medigap policies could be sold with drug coverage. This time frame coincides with the introduction of the Medicare Part D benefit.

Medicare beneficiaries who enroll in a Standalone Part D plan may not retain the drug coverage portion of their Medigap policy. People with Medigap polices that include drug coverage who enrolled in Medicare Part D by May 15, 2006 had a guaranteed right to switch to another Medigap policy that has no prescription drug coverage. Beneficiaries choosing to retain a Medigap policy with drug coverage after that date have no such right; in that case the opportunity to switch to a Medigap policy without drug coverage is solely at the discretion of the private insurance company issuing the replacement policy, but the beneficiary may choose to remove drug coverage from their current Medigap policy and retain all other benefits.

The vast majority of Medicare beneficiaries who hold a Medigap policy with drug coverage and then enroll in a Part D Plan after May 15, 2006 will have to pay a late enrollment penalty. The only exception is for the few beneficiaries holding a Medigap policy with a drug benefit that is considered "creditable coverage" (i.e. that it meets four criteria defined by the Centers for Medicare and Medicaid Services); a Medigap policy with prescription drug coverage bought before mid-1992 may pay out as much as or more than a Medicare Part D plan. Medigap policies sold in Massachusetts, Minnesota, and Wisconsin with prescription coverage may also pay out as much as or more than Part D.

Enrollment patterns

In 2006, 18% of Medicare beneficiaries were covered by a Medigap policy.[1] Almost a third of Medigap policyholders (31%) live in rural areas; in comparison, roughly a fourth of all Medicare beneficiaries live in rural areas.[5] Two-thirds of rural Medigap policyholders (66%) report incomes below $30,000.[5]

See also

References

External links


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Look at other dictionaries:

  • Medigap — Med‧i‧gap [ˈmedigæp] noun [uncountable] a type of private medical insurance in the US that covers costs not paid by Medicare: • Congress has now enacted legislation to standardize Medigap policies. * * * Medigap UK US /ˈmedɪɡæp/ noun [U]… …   Financial and business terms

  • Medigap — a system in the US by which people who have Medicaid pay money to a company so that they can receive additional medical care and services that they need ▪ My mom has to pay high premiums every month for Medigap to cover prescription drugs …   Dictionary of contemporary English

  • medigap — [med′i gap΄] adj. [also M ] Informal designating or of an insurance policy purchased to supplement the coverage provided by Medicare …   English World dictionary

  • Medigap — An insurance policy in the United States that supplements Medicare benefits and presumably fills the gaps in healthcare coverage. * * * med·i·gap med ə .gap n, often attrib supplemental health insurance that covers costs (as of medical care or a… …   Medical dictionary

  • medigap — noun Usage: often capitalized, often attributive Etymology: Medicare + gap Date: 1975 supplemental health insurance that covers costs (as of medical care or a hospital stay) not covered by Medicare …   New Collegiate Dictionary

  • medigap — /med i gap /, n. (sometimes cap.) private health insurance that supplements coverage for people already covered by government insurance. [MEDI(CAL) + GAP, on the model of MEDICARE] * * * …   Universalium

  • Medigap — noun A type of medical insurance for expenses not covered under Medicare …   Wiktionary

  • medigap — med·i·gap …   English syllables

  • medigap — med•i•gap [[t]ˈmɛd ɪˌgæp[/t]] n. ins bus (sometimes cap.) a supplemental health insurance that provides coverage for people whose government insurance benefits are insufficient • Etymology: 1975–80; medi (cal) +gap …   From formal English to slang

  • medigap — ˈmedə̇ˌgap noun Usage: often capitalized, often attributive Etymology: Medicare + gap (I) : supplemental health insurance that covers costs (as of medical care or a hospital stay) not covered by Medicare * * * /med i gap /, n. (sometimes cap.)… …   Useful english dictionary